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Monday, May 31, 2010

Google Says it Helps Generate $54 Billion for Businesses and NonprofitsLA Times

A report by the Internet giant says $14 billion of that economic activity is in California, where it is based. Critics say the report is an attempt to spruce up its image as it faces greater scrutiny.

Google Inc., hoping to burnish its image, said it helped generate $54 billion in business activity for companies, Web publishers and nonprofits last year.

More than $14 billion of that economic activity was in California, where it has more than 9,000 employees and has its headquarters, the Internet giant said in a report released Tuesday.

Google said it calculated the revenue generated by its search engine and the ads that run next to the results as well as the amount it pays to websites that run the ads and grants made by its nonprofit arm.

Few question that Google, like other major technology companies such as Apple Inc., has a huge ripple effect on the nation's economy. Google has also been a boon to small businesses that use its products to get noticed and to get customers.

But critics say Google is emphasizing its role in creating jobs and economic development to counter a growing perception on Capitol Hill that it abuses its dominant position in online advertising. Economic impact studies are commonly employed by technology companies campaigning for support in Washington and elsewhere. Microsoft Corp., for example, has done a few.

Google has come under increased scrutiny from lawmakers, regulators and privacy watchdogs. The Federal Trade Commission took six months to approve its $750-million acquisition of mobile advertising startup AdMob. Two recent developments also did not help Google's image: missteps with social networking service Buzz and collection of private data over WiFi networks.

"Google has lost control of its image. Some have started to position Google as the evil company," said technology analyst Rob Enderle, who has done consulting work for Microsoft and other tech firms. "Google is rolling out a marketing campaign to get people to look at them in a more balanced and positive way so they don't get pounded by politicians."

A spruced-up image is just as important in attracting investors, Enderle added. "People have trouble investing in a company that has a declining image," he said.

Google, which had $23.7 billion in revenue last year, is also facing intensifying competition from rival Internet upstarts such as Facebook Inc. and Twitter Inc. The report prepared by Google chief economist Hal Varian breaks down Google's economic effect in all 50 states and includes profiles of small businesses.

The company said businesses bring in $2 in revenue for every $1 they spend on AdWords, Google's online search advertising program. Separately, Google assumed that businesses get five clicks on their search results for every one click on their ads. Based on that, the company calculates that businesses get $8 in profit for every $1 they spend on AdWords.

Google said the estimates were conservative. California is the major beneficiary of Google largesse in part because the company has its headquarters in Mountain View, Calif.

The head of the House Judiciary Committee is asking Google Inc. and Facebook to cooperate with any government inquiries into privacy practices at both companies.

Michigan Democrat John Conyers sent letters to Google and Facebook on Friday amid mounting concern in Congress that the two online companies are not adequately protecting personal privacy on the Internet.

Facebook has come under fire for sharing user information with a handful of other online services as part of its new "instant personalization" program, which is intended to let Facebook members share their interests in everything from music to restaurants with others in their social network. The program draws information from a member's profile to customize several other sites, including the music service Pandora.

Facebook simplified its privacy controls this week in response to the backlash among users. As part of the changes, it added a tool to make it easier for members to turn off the instant personalization service.

Conyers asked Facebook on Friday to provide details about its sharing of member information with third parties and about its privacy policies. Several privacy watchdog groups, including the Electronic Privacy Information Center, have already filed a complaint against Facebook with the Federal Trade Commission. The FTC has been reviewing the privacy policies of Facebook and other social networks.

Facebook spokesman Andrew Noyes said the company looks forward to meeting with Conyers' staff to explain its privacy practices and policies.

Conyers stopped short of saying the Judiciary Committee will begin its own investigations into Facebook and Google.

Google recently admitted that it had sucked up fragments of e-mails, Web surfing behavior and other online activities over public Wi-Fi networks in more than 30 countries while it was photographing neighborhoods for its "Street View" mapping feature. The company said it discovered the problem following an inquiry by German regulators.

Conyers is asking Google to retain the data collected by its Street View cars along with related records until any federal and state inquiries are complete. At least two House members, Rep. Joe Barton, R-Texas, and Rep. Edward Markey, D-Mass., have already asked the FTC to look into the matter and are seeking more information from Google about the incident.

Google already has hired a security consulting firm, iSEC partners, to make an encrypted copy of all the U.S. data collected by Street View to ensure the information is preserved, according to records in a federal lawsuit filed against the company in Portland, Ore. The judge overseeing that case has ordered Google to retain the data.

Thursday, May 27, 2010

Young Adults Keeping Closer Tabs on 'Online Reputations'

USA Today

The Web often comes across as a global watering hole where young adults freely trade personal information while more cautious older visitors stand to the side for fear of losing a grip on their online privacy.

But a new survey turns that notion on its head, showing that those 18 to 29 are more likely than older Internet users to keep a keen eye on their online profiles and who can access them, according to a Pew Internet & American Life Project report out Wednesday on "Reputation Management and Social Media." Among the findings:

• 44% of young adult Internet users say they take steps to limit the amount of information available about them, compared to 33% of users ages 30 to 49 and 25% of those ages 50 to 64.

• 71% of younger social networking site users actively change their privacy settings to limit what they share with others online, compared to 55% of those 50 to 64.

• 41% have removed their names from photos of them posted by others, compared to just 18% of those 50 to 64.

"The prevailing notion of young adults is that they have a radically different perception of privacy, one that is very free," says Mary Madden, the report's lead author. "But this data shows they are every bit as concerned with privacy and are more engaged in monitoring their information than older users."

Ari Schwartz, of the non-profit Center for Democracy & Technology, in Washington, D.C., agrees that "this validates that young people do care about privacy, though it has to be in the context of their online lives." As for older users of social networking sites, "the issue isn't really that they're not interested in privacy so much as the fact that often they just aren't sure how to protect themselves."

Madden notes that the Pew survey was conducted before Facebook's recent tweaks to its privacy settings, "but clearly what they've done fits in with the concerns of younger social network site users."

She says that the frequency with which younger users connect on social media means there is usually more data to protect. "Older users just aren't on as much, so consequently they may not see as much of a threat to their information."

Younger social networking site users are in fact the most distrustful of the very sites they frequent. Some 28% of those 18 to 29 reported they "never" trust sites such as Facebook, MySpace and LinkedIn, vs. 18% of those ages 50-plus. The most trusted of Web destinations among the younger online crowd were news sites (11% said "Just about always,") while the 50-plus group trusted health news sites most.

Only 4% of those surveyed reported having embarrassing or inaccurate information about them released online, a figure that is unchanged since 2006. Some 8% reported having asked someone to take down information about them, with 82% saying those requests are granted without issue.

Many Internet users also felt comforted by a feeling of "privacy through obscurity," says Madden, "which resulted from Web searches about themselves that didn't turn up much of concern."

When self-searchers put their name in a search engine, 63% said they found at least some relevant material about themselves. But 35% said such queries did not yield relevant results. Just 31% said the results on the first page concerned them, while 62% said results turned up information about someone with a similar name.

Adobe's Flash video software has become a flashpoint in negotiations between Apple CEO Steve Jobs and Big Media.

On a day when Apple execs probably cheered the fact the company had surpassed Microsoft as the world's most valuable tech company, Jobs was grappling with resistance from Tinseltown over Apple's ongoing fight with Adobe.

Sources said several large media companies, including Time Warner and NBC Universal, told Apple they won't retool their extensive video libraries to accommodate the iPad, arguing that such a reformatting would be expensive and not worth it because Flash dominates the Web.

Though the iPad has been a huge hit, media companies are feeling emboldened in their rebuffing of Apple by the launch of rival touch-screen tablet devices, such as the ones coming from Dell Computer and Hewlett-Packard, sources said.

In addition, one media executive pointed out that Apple's ability to dictate terms to the media giants will be weakened further by Google TV, a software product that enables viewers to watch online video on their big-screen TVs.

Jobs banned Flash software from running on Apple devices, arguing that the world's most popular video software is unfit for his devices. Instead, he favors video software written in Web software language called HTML5.

Said an Apple spokeswoman, "We believe in open standards like HTML5."

The media companies' refusal to cave in to Jobs marks another setback at a time when Apple has had its share of both good and bad news.

In the plus column, Apple's $221.1 billion market cap yesterday topped Microsoft's $219.2 billion, making it the most valuable tech company. However, Apple is facing scrutiny from the Justice Department over tactics it uses in pricing songs sold on iTunes.

In the Apple vs. Adobe fight, Big Media's decision not to acquiesce to Apple's demands will be a boon to Adobe, which has gotten beaten up by Jobs' withering criticism of Flash.

Time Warner, in particular, is against the walled-garden, subscription-only model promoted by Apple in part because Time Warner is promoting its "TV Everywhere" initiative, which aims to make content platform agnostic so long as users can prove they are pay-TV customers.

Not surprisingly, Disney, which counts Jobs as its largest shareholder, has created an iPad app that lets users watch ABC shows for free.

CBS, using an iPad-enabled Web browser, is also working with Apple, but to a limited extent, offering only a handful of shows.

Both Fox News (which, like The Post, is owned by News Corp.) and CNN offer free video clips using HTML5 on the iPad.

BERLIN — Google has balked at requests from regulators to surrender Internet data and e-mails it collected from unsecured home wireless networks, saying it needed time to resolve legal issues.

In Germany, Google said it was not able to comply with the Hamburg data protection supervisor’s Thursday deadline to hand over data the company had collected — inadvertently, it says — while roving cars were compiling its Street View photo map archive.

Ironically, the company implied that German privacy laws were preventing it from turning over the information, even to a government agency.

“As granting access to payload data creates legal challenges in Germany which we need to review, we are continuing to discuss the appropriate legal and logistical process for making the data available,” Peter Barron, a Google spokesman in London, said in a statement. “We hope, given more time, to be able to resolve this difficult issue.”

The Hamburg data protection supervisor, Johannes Caspar, expressed his disappointment. In a statement, he said the state prosecutor, Lutz von Selle, had assured him that complying with the request would not constitute “criminal behavior” by Google.

“Therefore there is no apparent reason to still withhold the data from us,” Mr. Caspar said, while noting that prosecutors in Hamburg, where Google has its German headquarters, have opened a criminal investigation.

Mr. Caspar did not specify what steps he might take next.

Meanwhile, the privacy commissioner in Hong Kong, Roderick B. Woo, threatened unspecified sanctions after Google did not respond to his request to inspect data collected in the territory by the roving cars. Mr. Woo said Google had ignored a Monday deadline to turn over the information.

“I am dismayed by Google’s apparent lack of sincerity in its handling of this matter,” Mr. Woo said in a statement. “I do not see that Google is taking the matter seriously enough. Unless some remedial measures are taken by Google promptly, I shall have to consider escalating the situation and resort to more assertive action.”

A Google representative in Hong Kong could not be reached immediately for comment Thursday.

The standoffs increase the chance that Google may face fines and legal action in Europe and Asia.

The company has said its cars collected 600 gigabytes of “fragmentary data” from unsecured Wi-Fi networks in 33 countries and Hong Kong. It has declined to describe the data in more detail, and says it was gathered inadvertently because of a programming error.

Criticism of the search company’s privacy practices has been mounting in Europe, where on Wednesday an advisory panel to the European Commission accused Google, Microsoft and Yahoo, which are all U.S. companies, of violating European Union data retention rules by keeping information typed into their search fields from individual computers for more than six months.

Although fines and administrative sanctions in privacy cases tend to be limited — in Germany the maximum penalty is €50,000, or $61,500 — one privacy expert said Google’s lack of compliance with regulators’ requests could damage its reputation.

“Google’s refusal to hand over the data will be seen as a declaration of war by European regulators,” said Simon Davies, the director of Privacy International, a London organization representing data protection groups in 40 countries. “This is about sovereignty and a country’s right to determine on its citizens’ behalf what is right and what is wrong.”

Google, based in Mountain View, California, has offered to destroy the data, but has not allowed regulators to see and verify what it has collected. Google has destroyed data collected in Denmark, Ireland and Austria at the request of local regulators.

But eight other European countries — Britain, Germany, France, Spain, Italy, the Czech Republic, Switzerland and Belgium — have asked Google to retain data collected in those nations, which may be used as evidence in future legal proceedings.

In the United States, the chairman of the Federal Trade Commission, Jon Leibowitz, told Congress last week that his agency would look into Google’s actions.

Some have questioned Google’s assertion that it gathered the data inadvertently.

“If the company is fighting this so hard, it suggests there is more to this than meets the eye,” said Mr. Davies, of Privacy International. “The real question is: What was Google collecting from unwitting individuals and why? So far, nobody really knows.”

One privacy lawyer said Google might be wagering that paying fines and enduring negative publicity was preferable to giving regulators insight into its data collection practices.

“Remember that Microsoft’s reputation took a hit for a decade in Europe while it faced its antitrust suit here,” said Ulrich Börger, a privacy lawyer in Hamburg at Latham & Watkins, a U.S. law firm. “But at the end of the day, the negative publicity did not affect the company’s business bottom line in Europe.”

Regulators and prosecutors may be hard-pressed to compel Google to relinquish hard drives that are not being kept in their countries.

“Our understanding is that the data collected, including Wi-Fi data, is held overseas in the United States,” said Karen Curtis, the Australian privacy commissioner.

Prosecutors in Hamburg may also have difficulty bringing charges because Germany has no legal concept of corporate criminal liability. Hamburg prosecutors would have to prove that individuals working for Google deliberately broke wiretapping laws.

Proving that the driver of a Street View recording vehicle had such knowledge and intent may be difficult, said Ulrich Börger, a privacy lawyer in Hamburg at Latham & Watkins, a U.S. law firm.. “This is not going to be an easy prosecution,” he said.

A Chinese novelist’s lawsuit against Google over its online library is going ahead in court after settlement talks failed, The Associated Press reported from Beijing.

The novelist, Mian Mian — known for lurid tales of sex, drugs and nightlife — filed suit in October after her latest book, “Acid House,” was scanned into the library. Google says it removed the work after receiving Ms. Mian’s complaint, but the author is suing for damages of 61,000 renminbi, or $9,000, and a public apology.

A Beijing court held a hearing Wednesday after talks ordered by the judge failed to produce a settlement, said Sun Jingwei, Ms. Mian’s lawyer. The next court date has not been set, Mr. Sun said. A Google spokeswoman in Beijing, Marsha Wang, declined to comment.

Yahoo Inc Chief Executive Carol Bartz said the company would keep modernizing its online properties through the summer of 2011 as it strives to increase the time people spend on its sites.

Bartz told analysts at a briefing on Wednesday that Yahoo was focused on infusing its network of more than a dozen websites with additional social media, video, and local content. The network includes shopping, sports and finance sites.

She said Yahoo had no plans to follow competitors like Google Inc and Microsoft Corp by developing its own smartphone device or operating system software for smartphones.

"I don't want to have a handset. I don't want to be in that side of the business," said Bartz. "We want to have the best, best applications."

Yahoo has been reorganizing its business, shedding assets and acquiring new companies under Bartz, who began her current role in January 2009.

On Wednesday, Yahoo announced a partnership with Zynga in which Zynga social networking games, such as FarmVille, will be available across Yahoo's online properties.

Last month, Yahoo acquired Associated Content, an online publisher that offers articles and videos created by a network of freelancers.

Last July, Bartz signed a 10-year deal with Microsoft to save hundreds of millions of dollars a year in expenses by shifting Web indexing chores to Microsoft while Yahoo focuses on improving searching.

"Yahoo has its focus, it is excited about its future, and it has its pride back," said Bartz, who made headlines two days ago for using an expletive in a rebuke of a technology blogger who was interviewing her onstage at a conference in New York.

Yahoo is facing increasing competition from other Internet companies.

Since September, when Yahoo launched a $100 million advertising campaign, unique visitors to Yahoo websites in the United States declined 2.6 percent to 155.6 million in April and total page views declined 11.4 percent, according to comScore, an Internet analytics company in Reston, Virginia.

In contrast, unique visitors and page views increased in April at Google, Microsoft and Facebook.

Yahoo executives at Wednesday's analysts' event said the company expects to complete integration of its search technology with Microsoft in all 59 countries in which it operates by the second quarter of 2012.

Some analysts and investors have expressed concern that Yahoo is offsetting cost savings from its deal with Microsoft by spending money on other parts of the business.

Bartz defended the spending, explaining that Yahoo needed to retrofit many of its websites to bring them up to date and to make them easier to customize.

Wednesday, May 26, 2010

More Legal Problems for Twitter

Associated Press

An American Civil Liberties Union lawyer said Thursday his organization is helping two anonymous Twitter users fight an effort by prosecutors to unmask them after they tweeted criticism of the Pennsylvania attorney general, who is running for governor.

ACLU attorney Vic Walczak said he will ask a judge to throw out a subpoena seeking the identities of the two Twitter users, "bfbarbie" and "CasablancaPA," if an agreement with Attorney General Tom Corbett's office can't be worked out.

Walczak said the subpoena by a statewide investigative grand jury is an unconstitutional retaliation that violates First Amendment free-speech protections.

"It's a prized American right to criticize government officials, and to do so anonymously," Walczak said.

A Corbett spokesman said the subpoena was partly related to a Friday sentencing hearing for former Democratic legislative aide Brett Cott. He is one of three people convicted in March of public corruption charges in the ongoing investigation into the alleged illegal use of legislative employees and government resources to run political campaigns.

The grand jury on May 6 subpoenaed the identities and other information about the two users from Twitter Inc. Corbett's office has been using the highly secretive grand jury process for the past several years to look into public corruption allegations involving the General Assembly.

Twitter attorney Timothy Yip issued a statement that the company only discloses user information under "limited circumstances."

If the company believes it is legal to do so, Twitter notifies users whenever it receives requests for their information that it believes it is obligated to share, Yip said.

"This policy is designed for maximum transparency and gives users an opportunity to object," he said.

A Twitter spokesman said the company had not turned over any information to Corbett's office as of Thursday afternoon.

Attorney general's office spokesman Kevin Harley said the subpoena "has nothing to do with criticisms of the attorney general."

"There are many bloggers and other Web sites that are critical of the attorney general," Harley said. "That's not what this is about."

In an interview with the AP last year, Corbett said he was aware of anonymous critics of his investigation, and mentioned Cott by name.

"We know people like Brett Cott are on the blogs all day, making stuff up," said Corbett, who won the Republican gubernatorial nomination on Tuesday.

Cott was an aide to former Rep. Mike Veon, D-Beaver, who also was convicted of multiple counts. Veon's sentencing is scheduled for next month.

Twitter user CasablancaPA links to an anonymous blog, "CasablancaPA: Exposing the hypocrisy of Tom Corbett," which also has criticized Corbett and how his office has handled the investigation of the Legislature known as Bonusgate.

In a tweet Thursday, bfbarbie called Corbett "an evil man," and CasablancaPA wrote that Corbett "should try reading the blog he wants to shut down a little more closely."

A sentencing memorandum filed by prosecutors on Wednesday accused Cott of having "extensively and anonymously utilized" the CasablancaPA blog "to deflect blame and deny responsibility for his criminal conduct and to attack and malign the investigative and prosecutorial process."

Cott and his lawyer both declined comment about CasablancaPA - the blog or the Twitter user - on Thursday.

Bryan Walk, Cott's defense attorney, said the grand jury was wrong to issue the subpoena, however.

"They are completely abusing the process trying to seek this information," Walk said.

SEATTLE — The sudden departure on Tuesday of two top Microsoft executives, once considered rising stars, highlights the company's growing frustrations trying to keep pace with Apple and Google in introducing hot consumer products.

Leaving are Robbie Bach, 48, president of Microsoft's entertainment and devices division, and J Allard, 41, Bach's senior vice president for design and development.

"It's a pretty big shake-up, mostly related to their mobile (devices) business not performing where it needs to be," says Matt Rosoff, analyst at research firm Directions on Microsoft.

With Apple's iPhone and Google's Android phones capturing buyers' fancy, Microsoft shipped 15 million Windows smartphones in 2009, down from 16.5 million in 2008, according to market researcher Gartner. The Kin, a new youth-oriented cellphone, has gotten lukewarm reviews. And development of the Courier, a dual-screen tablet PC that was to take on Apple's iPad, has been suspended.

Bach's biggest sin may have been his failure to keep Hewlett-Packard as a major supplier of Windows smartphones, says Charles King, principal analyst at Pund-IT consultancy. HP is acquiring device maker Palm for $1.2 billion and launching its own proprietary line of smartphones. "It's one thing to get dumped on by your competitors, quite another to suffer a slight from a friend," King says.

Bach said he was retiring to spend more time with his family and do non-profit work.

No replacement will be named. The executives heading up two crucial initiatives — the introduction later this year of Xbox "Natal" 3D games and Windows Phone 7, an upgrade to the software used in Windows smartphones — will report directly to Ballmer.

Xbox is a pop culture hit — but not yet a profit center for the company. And Microsoft remains under pressure on other fronts. Office 2010, the latest version of its top-selling clerical suite, is expected next month. Office is being challenged by Google Apps and other Web-based business tools.

Microsoft marketing executives recently made a major gaffe by naming the newest version of its database server software SQL 2008 Revision 2, instead of SQL 2010, says Trip Chowdhry, analyst at Global Equities Research. Sales staff are "having a tough time persuading customers that the new version includes revolutionary technologies, not just bug fixes," Chowdhry says.

Bach's exit could be a wake-up call. "If Robbie Bach can be shown the door, certainly no one at the company is sacrosanct," King says.

Tuesday, May 25, 2010

Nokia Corp. and Yahoo Inc. unveiled a partnership to work together on their email, chat and navigation services in an effort to bolster their respective positions in the world of mobile phones.

Nokia will power Yahoo's maps and navigation services, while Yahoo will run the email and chat programs on Nokia's Ovi platform. The companies weren't disclosing the financial terms.

Nokia and Yahoo hope the alliance will improve their profiles in the industry, with Nokia looking to expand its awareness in North America and Yahoo getting its services in more mobile phones around the world, particularly in the emerging markets. Both companies need a catalyst; smartphone players such as Apple Inc., Research In Motion Ltd. and Google Inc. have outpaced the market.

"It's a great example of an approach to partnership, which is increasingly part of our DNA," said Yahoo Chief Executive Carol Bartz.

"This fits well with two companies with key complimentary strengths," said Nokia Chief Executive Olli-Pekka Kallasvuo.

The companies say the partnership will also allow Yahoo to better focus its resources on its consumer experience and other services. Ms. Bartz said that despite the perception of Google's dominance, Yahoo is "neck and neck" in providing Web services. However, she acknowledged that her company was behind in mapping and navigation services. Yahoo also stands to benefit globally because its name will accompany the chat and messaging services found on Nokia phones found around the world.

The Internet search company also taps into Nokia's considerable navigation services. Nokia spent $8.1 billion to acquire Navteq and has made a string of other acquisitions to augment its portfolio of location-based services. "I would say Nokia's mapping offering is unique and second to none in the marketplace," Mr. Kallasvuo said.

Nokia, meanwhile, benefits from Yahoo's strong name recognition in the U.S. The handset maker, one of the largest technology companies in the world, has struggled with the awareness of Ovi, particularly in North America. It hasn't had much success getting the U.S. carriers to push the service or its phones, although the company has made a more concerted effort to focus on the market in the past few years.

While Nokia is the world's largest mobile phone maker, it continued to lose market share, falling from 36.2% to 35% in the first quarter, according to information technology research firm Gartner Inc.

Some critics believe neither company is doing enough to catch up with the industry's faster growing players. "This is a co-branding agreement when both companies probably need more structural changes," said Avi Greengart, an analyst at Current Analysis.

Loveable Facebook founder Mark Zuckerberg called his first few thousand users "dumb fucks" for trusting him with their data, published IM transcripts show. Facebook hasn't disputed the authenticity of the transcript.

Zuckerberg was chatting with an unnamed friend, apparently in early 2004. Business Insider, which has a series of quite juicy anecdotes about Facebook's early days, takes the credit for this one.

The founder was then 19, and he may have been joking. But humour tells you a lot. Some might say that this exchange shows Zuckerberg was not particularly aware of the trust issue in all its depth and complexity.

Facebook is currently in the spotlight for its relentlessly increasing exposure of data its users assumed was private. This is nicely illustrated in the interactive graphic you can find here or by clicking the piccie to the right.

In turn, its fall from grace has made backers of the 'social media' bubble quite nervous. Many new white collar nonjobs created since the mid-Noughties depend on the commercial value of your output, and persona;l information. (Both are invariably donated for free).

But there's a problem.

Much of the data created by Web2.0rrhea is turning out to be quite useless for advertisers - or anyone else. Marketeers are having a harder time justifying the expenditure in sifting through the Web 2.0 septic tank for the odd useful nugget of information.

Facebook's data stash is regarded as something quite special. It's authenticated against a real person, and the users tend to be over 35 and middle class - the ideal demographic for selling high value goods and services. In addition, users have so far been 'sticky' to Facebook, something quite exceptional since social networks fall out of fashion (Friends Reunited, Friendster) as quickly as they attract users.

Facebook also has something else going for it - ordinary users regard it as the natural upgrade to Hotmail. In fact, once the crap has been peeled away, there may not be much more to Facebook than the Yahoo! or Hotmail Address Book with knobs on: the contact book is nicely integrated, uploading photos to share easier, while everything else is gravy. Unlike tech-savvy users, many people remain loyal to these for years.

Monday, May 24, 2010

Google Inc.'s $750 million acquisition of mobile ad service AdMob cleared its final hurdle Friday with a boost from AdMob's jilted suitor, Apple Inc.

The Federal Trade Commission said it unanimously decided to approve Google's AdMob deal mainly because of Apple's recent push into the $600 million mobile advertising market in the U.S. The ruling closes a six-month antitrust investigation.

The emergence of another deep-pocketed competitor eased the FTC's concerns that Google would be able to use AdMob as a springboard for extending its dominance into the nascent field of wireless devices.

"The presence of Apple made it for hard for the commission to construct a merger challenge that it felt it could win," said Jeff Shinder, a New York antitrust lawyer who is a former special counsel to the FTC.

Apple's role in persuading the government to sign off the deal is a weird twist because the maker of the iPhone and iPad was negotiating to buy AdMob before Google swooped in with a higher bid last November.

Shortly after the AdMob snub, Apple bought a smaller mobile ad service, Quattro Wireless, that is providing the technology for the iAd platform that persuaded the FTC to sign off on Google's deal.

Now that it has regulators' blessing, Google said it will take over AdMob within the next few weeks.

This marks the second time in three years that the FTC has launched an extensive investigation into a Google acquisition aimed at expanding its share of the digital ad market. The FTC spent a year examining Google's $3.2 billion acquisition of online ad service DoubleClick Inc. before approving it in March 2008.

The government scrutiny reflects the widening worries about the power Google has amassed over the past decade as its search engine became the Internet's main gateway and its advertising network became the Web's richest gold mine.

"How this possibly can be construed as promoting competition is incomprehensible," said John Simpson of Consumer Watchdog, a strident Google critic. "What it demonstrates is Google's clout in Washington."

Google has ramped up its government lobbying efforts in part to convince regulators and lawmakers that it faces robust competition from a phalanx of fierce rivals that include Microsoft Corp., Yahoo Inc., Facebook and its one-time ally, Apple.

Google had strongly indicated that it would have gone to court had the FTC tried to block the AdMob deal.

The company believes advertising on mobile devices eventually will be as lucrative as marketing on computer screens, and it considers AdMob to be a key piece in its strategy to make more money from people on the go.

AdMob, launched four years ago by Omar Hamoui, runs a network that delivers targeted advertising to websites and to online applications tailored for smart phones, including Apple's iPhone and devices powered by Google's Android software.

The FTC had feared that a combined Google-AdMob would thwart competition and possibly have a ripple effect on the mobile phone applications that rely on ads.

Combined, Google and AdMob will have a 21 percent share of the U.S. mobile ad market followed by Millennial Media at 12 percent, according to the most recent statistics from International Data Corp. Yahoo is next at 10 percent followed by Microsoft at 8 percent and Quattro Wireless at 7 percent.

U.S. spending on mobile advertising is expected to approach $600 million this year and increase to nearly $1.6 billion in 2013, according to eMarketer. That's still smaller than spending for online ads delivered to laptops and desktops, but growth there is expected to be slower - to more than $33 billion by 2013, from a projected $25.1 billion this year.

The big question now is whether Google and Apple will be able to leverage their advertising networks and widely used platforms for mobile applications to create an effective duopoly in the market.

Industry analysts and mobile ad executives are skeptical and predict that other major companies will try to muscle into the market with acquisitions of their own. Other mobile ad services still in play include JumpTap, GreyStripe, Mojiva and Mobclix.

Microsoft and even some magazine publishers developing applications for mobile devices may emerge as buyers, said eMarketer analyst Noah Elkin. "A lot of molds have been broken in terms of who might try to get into this space," Elkin said. "Everyone wants access to this mobile audience."

As Google puts one regulatory investigation behind it, Apple could be wrestling with one of its own.

Apple is also facing increased regulatory scrutiny in Washington. Officials at the FTC and the Justice Department are currently sorting out which agency will examine whether the company is violating antitrust rules by requiring software developers to use Apple programming tools to create applications for the iPhone and iPad.

Despite antitrust and privacy concerns expressed by consumer groups, the Federal Trade Commission late last week greenlighted Google's $750 million acquisition of mobile ad company AdMob. Recent moves by Apple to stake out turf in the nascent mobile advertising field turned out to be a pivotal factor.

Earlier, Apple made a failed bid to acquire AdMob, then followed up by acquiring mobile ad firm Quattro Wireless for $275 million. And last month, Apple launched a mobile advertising system dubbed iAd.

The agency's blessing clears the way for a clash of tech titans. Google, Apple, Microsoft and Yahoo are expected to slug it out in advertising's hottest segment. Spending on mobile ads should nearly double this year to $433 million, according to IDC.

That's only a smidgen of the $31.5 billion U.S. advertisers will spend for online ads this year. But mobile ads are "strategically important," says IDC analyst Karsten Weide. "Mobile will be important for the mid- to long-term future, but not decisive within the next five years simply because search advertising will attract more absolute dollars."

AdMob gives Google a fast start. The search giant can offer advertisers the ability to run common ads on Google search results pages on PCs and on mobile devices, including Google Android phones, says Greg Sterling, senior analyst at Opus Research.

Apple's recent moves put it in the running. Apple has the iPhone and iPad, but lacks systems for selling and publishing ads. "It very much remains to be seen whether Apple can become an effective advertising company," Sterling says.

Meanwhile, Microsoft is about to blend its Bing search engine with Yahoo's online ad system. Both giants have the capacity to sell mobile ads. And it would not surprise Trip Chowdhry, analyst at Global Equities Research, if they go shopping among dozens of promising start-ups. "I look for Microsoft to make acquisitions," Chowdhry says.

Consumer groups vow to remain vigilant.

"We will press the commission to ensure mobile privacy is protected," says Jeff Chester, director of the Center for Digital Democracy.

SAN FRANCISCO — In a year steeped in significant anniversaries for tech companies, one that has been largely ignored is the 25th of online pioneer AOL.

Today, the company originally known as Quantum Computer Services, which introduced millions of Americans to the Internet, is still around but not what it used to be.

Sales are declining and its subscriber base is dwindling as it copes with a slide in online advertising revenue and tries to recast itself amid stiffening competition.

AOL has been trying to reinvent itself as a content and advertising company since it regained its independence last year from media giant Time Warner, with which it merged in 2001. Time Warner spun off AOL to shareholders in December, ending what many experts called the most disastrous corporate merger ever.

Which leads to the question: Can AOL regain its mojo?

As the company enters Year 26 of its existence, its current CEO and one of its founders both think it can, as they reflect on AOL's past, present and future.

"Sure, it will be around for a long time," AOL co-founder Steve Case says. "The question is, how do you return it to being a leader. I think (AOL CEO) Tim (Armstrong) is on the right track."

Adds Armstrong: "The AOL brand is still one of the most meaningful in Internet history. In many cases, it was (people's) first (experience) online."

America Online took consumers by storm in the 1990s as a dial-up Internet company. During its heyday, it helped redefine how people communicate, ushering in an era of PCs with built-in modems and chat-room conversations. It was even the subject of a Tom Hanks-Meg Ryan romantic comedy, You've Got Mail, in 1998.

At its zenith, AOL had nearly 30 million members.

But its glory was short-lived in the fast-paced digital age. Dial-up business shriveled over the years as faster broadband connections from cable and phone providers have become increasingly popular. During its most recently announced quarterly results, in late April, AOL said its dial-up Internet service revenue sank 28% to $283 million, and its advertising revenue slid 19% to $354 million.

Even deeper, AOL could not shake the stigma of being considered a website for "newbies," says Ken Lim, chief futurist at CyberMedia Convergence Consulting.

The advent of search engines meant more competition, offering consumers a cornucopia of other content-based sites. "The growth of search engines opened up the Internet, and made it OK to leave the walled garden of an AOL for safer alternatives," Lim says.

And yet, AOL remains one of the most recognizable brands in the world and a big draw. It ranked No. 5, in traffic, among all U.S. Web properties in April, with 115 million unique visitors, according to market researcher ComScore. (Google was No. 1, with 176 million unique visitors.)

"Not bad at all," analyst Lim says. "But AOL needs to figure out a way to maintain and grow that. Like everyone else, it comes down to monetization."

Reinventing AOL

The key to AOL's present and future lies in its ability to be the go-to content creator for emerging online platforms on Apple, Facebook and Google, where hundreds of millions of people congregate, Armstrong says.

AOL has been working to recast itself as a large-scale content and advertising business, operating websites such as tech blog Engadget, sports specialist FanHouse and personal-finance site WalletPop. It also is gearing up to launch Patch, a network of dozens of community news sites to scoop up local online ads.

"We're like the Procter & Gamble of the Web," Armstrong says.

But the process has been difficult, with advertising revenue dropping throughout last year. Revenue for search and display advertising suffered double-digit percentage declines, and the company said it expects ad sales to continue falling for the rest of the year.

That forced AOL earlier this year to shed 2,300 workers as part of a plan to slash operating expenses by $139 million through payroll cuts and exiting unprofitable businesses.

Last month, AOL announced a deal with Digital Sky Technologies, an Internet company targeting Russian-speaking markets, to buy its ICQ instant-messaging service for $188 million. Additionally, AOL acknowledged it is evaluating the sale or shutdown of its Bebo social networking site this year.

It's all part of a roller-coaster ride for AOL, which has survived wrenching changes in a fast-paced industry that is maturing. This year, Microsoft turned 35 years old, and Cisco Systems celebrated its 25th anniversary. Next year, Apple turns 35 and IBM a century old.

"AOL was at the epicenter of the Internet being the hot thing," Case says.

"It was a struggle, and hardly an overnight success," Case says, noting it took AOL seven years from its creation in 1985 to reach 200,000 customers.

"But we stuck with it and made our mark," he says. "We believed that some day the online medium would be ubiquitous."

Sunday, May 23, 2010

Google: Sure it's Big. Is That Bad?

CNBC

IN the 1990s, Gary Reback, a Silicon Valley lawyer, almost single-handedly brought the antitrust weight of the federal government down on that era’s high-tech heavyweight, Microsoft . Now Mr. Reback contends there is a dangerous new monopolist in the catbird seat: the search giant Google .

This month, Mr. Reback shepherded Adam and Shivaun Raff, the husband-and-wife entrepreneurs behind the London comparison shopping site Foundem, around Washington. The three held meetings with Congressional staff members and antitrust enforcers at the Department of Justice and the Federal Trade Commission.

Their goal was to air the Foundem couple’s complaint that in 2006, Google’s supposedly objective algorithms suddenly dropped Foundem into the netherworld of Google search results. They say Google also raised the rates Foundem had to pay to advertise alongside search results. These moves, the couple say, pushed their comparison shopping site out of view, and Google later put the spotlight on its own shopping listings.

Google is the “arbiter of every single thing on the Web, and it favors its properties over everyone else’s,” said Mr. Reback, sitting in a Washington cafe with the couple. “What it wants to do is control Internet traffic. Anything that undermines its ability to do that is threatening.”

“Google won a lot of good will by presenting itself as neutral to a lot of different content,” this person said. “The question is, are there real examples of chinks in their armor in their claims of neutrality?”

Google says its mission is to give users the information they’re looking for even if that means giving its own content priority and de-emphasizing sites it believes offer poor experiences. “Telling a search engine that it cannot innovate and show results in a way that benefits users would undermine the very goals of our competition laws,” says Matthew Bye, a Google lawyer.

But the search giant’s decisions on such matters may soon be judged by higher authorities. Over the last several years, it has become the canonical way to search the Web, an information doorway that dictates what kind of knowledge is visible to the browsing public. That growing market power has generated both sky-high profits and unwanted regulatory attention.

Almost a decade after Google promised that the creed “Don’t be evil ” would guide its activities, the federal government is examining Google’s acquisitions and actions as never before, looking for indications that the company’s market power may be anticompetitive in the worlds of Web search and online advertising.

“They are not just on the radar screen. They are the at the center of it,” said Tim Wu, a professor at Columbia University and the author of a forthcoming book on technology monopolies, “The Master Switch : The Rise and Fall of Information Empires.” “If you are in the federal government and are interested in antitrust, you are looking at Google.”

Google has managed to squeak by most regulatory reviews. On Friday, the Federal Trade Commission approved Google’s $750 million acquisition of AdMob, a mobile advertising start-up. Staff members had initially planned to oppose the purchase, even saying in a statement that the deal “raised serious antitrust issues.” But the agency ultimately endorsed the deal , assuming that Apple ’s entry in the market would facilitate competition.

Nevertheless, the search giant may get an indication this summer of just how uncomfortable Washington can get for such dominant firms. Federal Judge Denny Chin is expected to rule in the next few months on Google’s amended settlement with authors and book publishers and whether the agreement gives the search giant too much control over the millions of library books that it scanned. The Department of Justice has opposed the settlement on two occasions.

At the same time, Google’s own missteps have prompted a new round of scrutiny. This month, it admitted that its camera-equipped cars, which drive around photographing the world’s neighborhoods for Street View images within Google Maps, had inadvertently collected fragments of communications from people using unsecured WiFi networks. Privacy advocates howled, while the F.T.C. and regulators in Europe said they were looking into the matter.

Taken together, these inquiries are a litmus test for the federal government’s willingness to challenge a widely liked and admired company and to take on some profoundly difficult questions.

Can monopolies exist online, when competition is only a click away? What constitutes anti-competitive behavior in the complex networked economy, where the very size of big companies allows them to operate more efficiently, and thus grow even bigger? Are consumers harmed if various services are bundled together, but everything is free?

Google executives acknowledge the scrutiny. “We’re getting larger, and we have been very disruptive within some industries,” says Alan Davidson, head of United States public policy at Google. “We know we have a giant bull’s-eye on our backs.”

IN Washington, there is significant disagreement over the proper scope of competition regulation and what the future should hold for Google — and both sides have big financial stakes.

On one side are companies like AT&T and Microsoft, which vociferously lobby against Google in the policy arena.

AT&T is Google’s staunchest foe in the battle over “net neutrality ,” a term used by Google and others who fear that telecommunications providers might throttle bandwidth for certain Internet services, discouraging innovation. Microsoft provides e-mail and other services in competition with Google and has a rival search engine, Bing, which controls 11.8 percent of the market in the United States. (Google has 64.4 percent, and Yahoo 17.7 percent, according to comScore .) Microsoft is also a paying member, along with Amazon.com and Yahoo, of the Open Book Alliance, a group founded by Mr. Reback to oppose the Google Books settlement.

Google oozes a confident, seemingly cavalier attitude. Its Washington office, a few blocks from the White House, has all the casual accouterments of other Google spaces, like massage chairs and foosball tables. Furthering the idea of an open, freewheeling atmosphere, the company uses a public meeting space at the office to present regular events that are available to the public, like conversations with authors and a recent panel about home energy use with Carol Browner , a senior energy official at the White House.

When it comes to government scrutiny, the company’s executives challenge the premise that Google is a monopoly, even as the company’s share of the search market inexorably rises, arguing that Google is still a minor player in the overall advertising market, which totals $800 billion a year.

Google also says that linking prominently to its own services over those of rivals is good for consumers and not malicious. Its famous search algorithm, conceived by one of the founders, Larry Page , at Stanford in the 1990s, uses a series of complex and opaque formulas to rank the sites within a set of search results. The algorithm is responsible for what Google calls the “organic” listings that appear on a search results page.

But increasingly, above and mixed throughout those search listings, Google presents links to its own services, like maps, YouTube videos, local business results and product search listings. Executives argue that providing these easily accessible results clearly benefits users. Rivals claim that this is self-serving, and that Google promotes its content even though there may be better material elsewhere.

Behind the scenes, Google is taking its challenges in Washington seriously, adding to its staff, increasing expenditures and meeting criticism head-on.

“As we have a bigger impact, we have to expect to have more kinds of scrutiny, and we have to adjust,” said Vic Gundotra, Google’s vice president of engineering, when asked whether Google could ever again make large acquisitions, like YouTube, without stiff government resistance. “It also means we have a lot of resources today that we didn’t have when we were tiny. So we have a lot of choices.”

To fight these and other battles, Google employs a dozen or so policy experts, including nine registered lobbyists, and a public relations staff of four. It also retains at least four Washington public affairs and communications firms.

According to public records, Google spent more than $4 million lobbying in 2009, a 160 percent increase since 2007. Much of that money was spent through entrenched Washington lobbying firms like the Podesta Group and the Franklin Square Group.

The search giant is still outgunned by its primary adversaries: AT&T spent $14.7 million on lobbying in 2009. Microsoft spent $6.7 million.

IN many ways, Google’s Washington push appears to be largely successful. In the last few years, the company has won battles over net neutrality, advocated making new parts of the wireless spectrum open to a multitude of devices, gotten all of its acquisitions approved by regulators and kept new privacy laws at bay.

Even last month, privacy activists, who have long focused on Google, were frustrated when Congress released a draft of a privacy bill meant to regulate data collection practices on the Web — which would be a first for the United States.

Provisions in the bill called for Web sites to discard customer data after 18 months or make it anonymous, and to offer users access to a “profile manager,” which would allow them to see why they were being shown certain ads. Both are already policies at Google. The company lobbied while the bill was being written and it was seen as largely favorable to the company.

The bill “demonstrated Google’s ability to frame the issue to their own benefit,” said Jeffrey Chester, director of the Center for Digital Democracy . “Google likely dodged a bullet.”

Google representatives declined to characterize the bill as any kind of legislative victory, saying they still had concerns about it. The response, Google allies say, is consistent with the company’s overall attitude in Washington.

“They don’t want to be a Washington player. They want to be seen as a technology company that explains to Washington what they’re doing,” said Markham C. Erickson, executive director of the Open Internet Coalition , an industry trade group of which Google is a member.

Mr. Erickson said that Google executives thought they were doing the right thing for consumers and the Internet, and that simply by educating lawmakers on Google’s good intensions, they would ultimately win the day.

But even Mr. Erickson acknowledges, “Once you’re big, you’re not cute any more.”

There is ample evidence that Washington regulators think Google has already outgrown its cute stage.

Jon Leibowitz , the chairman of the Federal Trade Commission since last March, has shown his willingness to stand up to Google, most recently with the F.T.C.’s inquiry last year into the board-level relationships among Google and two of its rivals, Amazon and Apple. That investigation caused several prominent Silicon Valley business leaders, including Eric E. Schmidt , Google’s chief executive, to give up board seats at other companies.

In January, Howard Shelanski, an F.T.C. economist, underscored the agency’s attention to Google. In a speech at the University of Colorado , Mr. Shelanski said that the concern over network neutrality should also apply to a dominant online search engine that might unfairly discriminate against individual companies.

Though he did not name the search engine, the implication was clear: the F.T.C. was worried that Google could show prejudice against competitors — exactly the complaint that has been levied by some comparison shopping sites, including Foundem.

Leading the Department of Justice’s antitrust division is Christine A. Varney , an assistant attorney general, who represented Netscape during the antitrust case against Microsoft over its practices promoting Internet Explorer. Ms. Varney has publicly said she thinks Google may merit antitrust scrutiny. “Microsoft is so last century,” she said in a 2008 speech. She said Google could be a problem because it had “acquired a monopoly in Internet online advertising.”

One person at the Department of Justice, who spoke on the condition of anonymity because he was not authorized to talk about the situation publicly, said that the antitrust division was constantly examining Google’s behavior, trying to gauge whether the company was living up to its claims of neutrality.

“Google won a lot of good will by presenting itself as neutral to a lot of different content,” this person said. “The question is, are there real examples of chinks in their armor in their claims of neutrality?”

But Google itself may be giving regulators and legislators more reasons to take a closer look. Its collection of private data over WiFi networks followed a similar misstep in February over the Buzz social network, which publicly exposed the contacts of Gmail users with little warning.

Google’s high-profile mistakes hurt because they convey the impression that Google’s behavior is increasingly inconsistent with its “Don’t be evil” mantra.

One of Google’s founders, Sergey Brin, acknowledged the mistake last week at the company’s annual conference for developers in San Francisco. “We screwed up, and I’m not making excuses about it,” Mr. Brin said. “Trust is very important to us, and we’re going to do everything we can to preserve it.”

Mr. Reback, the lawyer, is one person who does not trust Google to do the right thing. He is eager to talk about legal remedies to antitrust concerns, including appointing an independent expert to monitor Google’s algorithm to ensure that it does not unfairly penalize rivals like Foundem.

It sounds far-fetched. But Mr. Reback says that a serious conversation has started about Google’s power. “The government is finally onto the notion that they have to start asking questions about Google,” he said. “Google started off saying they were going to treat everything on the Web neutrally. That is the basis on which they secured dominance. And now they’ve changed the rules.”

Friday, May 21, 2010

Google, Partners Hoping People Want their Web TV

Associated Press

Google Inc. believes it has come up with the technology to unite Web surfing with channel surfing on televisions.

To reach the long-elusive goal of turning TV sets into Internet gateways, Google has partnered with Sony Corp., Intel Corp. and Logitech International. They unveiled their much-anticipated plan for a "smart" TV on Thursday, and Intel CEO Paul Otellini predicted the effort will be "the biggest improvement to television since color."

"Our goal is to make the same impact on television as the smart phone has had on the mobile phone market," said Rishi Chandra, the Google product manager who is overseeing the smart TV project.

The TVs are expected to go on sale this fall in U.S. Best Buy stores, with prices to be announced later in the year. Sales will expand to other countries next year.

Other companies have tried to promote Internet-connected TVs with little success during the past decade.

"I have seen this movie before," Gartner Inc. analyst Ray Valdes said of Google's ambitious plans. "They are going down a road littered with failed initiatives like this."

But Google and its partners believe they have developed a system that will make Internet TV simpler and more appealing. They are also counting on various websites to build news applications tailored to run on the Internet TV; they believe that would persuade more couch potatoes to begin interacting with their sets instead of just watching them.

Many households already have been connecting their TVs to the Internet, mostly to watch video through set-top boxes, video game consoles and Blu-ray players. Web-connected TVs are expected to account for about 19 percent of the U.S. sales of flat-panel models this year, with the share projected to rise to 46 percent in 2013, according to ABI Research.

Three of Google's biggest rivals - Apple Inc., Microsoft Corp. and Yahoo Inc. - also have been trying to bring more Internet video and services to televisions.

Apple CEO Steve Jobs once described his company's device for tethering TVs to the Internet as a "hobby." Forrester Research analyst James McQuivey expects Apple to become much more serious about its efforts now that Google is expanding into TV.

"The whole game for Google is to become the (operating system) for the living room and make sure Apple doesn't," McQuivey said.

Google, which made the bulk of its nearly $24 billion in revenue last year from Internet ads displayed on computer screens, wants to turn televisions into giant monitors for Web surfing so it can make even more money. The company estimates that television accounts for $70 billion in annual advertising in the U.S. alone.

Google has been trying to sell ads for regular television programming for the past three years, but analysts say that has yielded paltry dividends so far.

Thursday's demonstration of the Internet TV technology didn't go smoothly at a Google conference for about 5,000 software programmers.

So many people in the audience were using the conference's wireless access network that Google ran into repeated problems showing how its technology is supposed to toggle seamlessly between the Web and television programming. Google finally had to plead with the attendees to disconnect their smart phones from the network.

"Perhaps that was an omen of things to come," Valdes said.

Once it got enough bandwidth, Google was able to conduct a series of Internet searches in a drop-down box that appears at the top of television programs. The search results pointed to Internet videos and other content related to the television program on the screen.

A telecast of a sporting event can be shrunk into a small "picture-in-picture" box so a viewer can look at statistics or other material about the game on TV.

Viewers will also be able to make search requests by speaking into a remote that runs on Google's Android operating system.

And of course, users could simply use the entire screen for surfing.

Google CEO Eric Schmidt raved about the potential of the Internet TVs, although he acknowledged it might be difficult for some consumers to grasp at first. That's one reason he said Google decided to team up with Best Buy, which offers a "geek squad" to deal with complex technology.

"You have to actually see (the Internet TV) to get excited about it," Schmidt said after Thursday's preview.

Consumers who already have splurged on flat-panel TVs will be able to plug into the new technology by buying a set-top box made by Logitech or a Blu-ray player from Sony. Both devices will contain the same software and microprocessor as the new TV sets.

Sony will make the TVs, giving it a new product that could stand out from other flat-panel sets on the market. It will use microprocessors from Intel, which is hoping to reduce its dependence on personal computers; the Atom chip design that will serve as the brains of the smart TVs so far has mostly been used in inexpensive, lightweight laptops known as netbooks.

Google will provide the software, including Android and the company's Chrome Web browser. Logitech will supply a special remote control and wireless keyboard.

ISLAMABAD – The Pakistani government blocked access to YouTube on Thursday because of "sacrilegious" content on the video-sharing website, signaling a growing Internet crackdown against sites deemed offensive to the country's majority Muslim population.

The move against YouTube came a day after the government blocked access to Facebook amid anger over a page on the social networking site that encourages users to post images of Islam's Prophet Muhammad. The page sparked criticism because Islam prohibits any images of the prophet.

The Pakistan Telecommunications Authority did not point to specific material on YouTube that prompted it to block the site, only citing "growing sacrilegious contents." The government took action against both Facebook and YouTube after it failed to persuade the websites to remove the "derogatory material," the regulatory body said in a statement.

It welcomed representatives from the two websites to contact the Pakistani government to resolve the dispute in a way that "ensures religious harmony and respect."

The regulatory body said it has blocked more than 450 Internet links containing offensive material, but it is unclear how many of the links were blocked in the last two days. Access to the online encyclopedia site Wikipedia and the photo sharing site Flickr also was restricted Thursday.

The government blocked Facebook on Wednesday after a group of Islamic lawyers won a court order requiring officials to restrict access to the site until May 31. It was unclear if the ban against YouTube would also be temporary.

The Web page at the center of the Facebook dispute — "Everybody Draw Mohammed Day!" — encourages users to post images of the prophet on May 20 to protest threats made by a radical Muslim group against the creators of "South Park" for depicting Muhammad in a bear suit during an episode earlier this year.

The page sparked protests from radical students in Pakistan, with some holding signs urging Islamic holy war against those who blaspheme the prophet.

A series of cartoons of the prophet published in a Danish newspaper in 2005 sparked violent protests by Muslims around the world, including in Pakistan, and death threats against the cartoonists.

Facebook said Wednesday it was investigating the controversial page.

"While the content does not violate our terms, we do understand it may not be legal in some countries," the company said in a statement. "In cases like this, the approach is sometimes to restrict certain content from being shown in specific countries."

Online reaction to the Facebook ban was supportive in the initial hours after it was implemented. But comments on Twitter — which was still unblocked Thursday and drawing new users thanks to bans on other sites — showed many Internet users were angry about the new, wide-ranging restrictions.

"Sad and embarrassing day in the history of Pakistan. Tough times to be a Pakistani. Questionable decisions in a so called 'democracy,'" one user tweeted.

Pakistan blocked access to YouTube once before for two days in 2008 because of what it said was unIslamic content. Turkey, Thailand, Indonesia and Morocco have all blocked access to YouTube in the past for various reasons.

It remains to be seen how successful the government will be at keeping Pakistan's nearly 20 million Internet users from accessing the blocked sites. Other countries, such as China, permanently ban Facebook and YouTube. But citizens often have little trouble working their way around the ban using proxy servers and other means.

"What's common to Facebook and Lashkar-e-Taiba?" one user on Twitter wrote, referring to a Pakistani militant group. "They are both banned in Pakistan, but Pakistanis can still find them if they want to."

Thursday, May 20, 2010

Google's Search Market Share Slips as Bing Rivalry Heats Up

USA Today

Google's grip on the Internet search market has loosened just a tad.

The company's share of U.S. searches slipped to 64.4% percent in April, down from 65.1% in March, according to comScore. Meanwhile, Yahoo's share rose to 17.7%, up from 16.9%, while Microsoft Bing crept to 11.8%, up from 11.7%.

Those results are anything but trivial in the current competitive landscape, search experts say. Microsoft and Yahoo are working furiously behind closed doors to blend their search services. The roll out of what analysts have taken to referring to as BingHoo is expected sometime later this year. If the launch of BingHoo came today, it would command a 30% market share.

"Change is imminent for search engines catalyzed by Microsoft's launch of Bing and the push for a better way to deliver more user-centric search results," says Forrester analyst Shar VanBoskirk.

Meanwhile, Microsoft continues to do everything it can think of to keep Bing's momentum going. The software giant on Thursday launched a streamlined MSN Mobile homepage, featuring one-click access to Bing and compatibility with Apple iPhones and Google Android smartphones. Just two months ago, the company redesigned MSN's Internet homepage, also emphasizing deep integration with Bing.

Barry Schwartz, founder and administrator of searchengineroundtable.com, notes that Google, too, has been hustling. "Google has released some pretty cool stuff both on the normal browser search and especially mobile search," says Schwartz. "Just look at Android. And is there anything more innovative today than Google Goggles?"

Still, Google's major redesign of its search results pages, which the company rolled out last week, has gotten a decidedly mixed response. "A lot of people are off-put by the fact that the design changed," says Tom Demers, marketing director at search software firm WordStream. "The tweak in and of itself definitely isn't a game-changer."

Kevin Lee, CEO of search consultancy Didit.com says he expects Microsoft to continue showcasing Bing in its other products. "I think Bing will probably do some interesting integrations between Bing and Hotmail, Windows Messenger and Xbox Live," says Lee. "They need to leverage their areas of strength and turn those areas of strength into adoption."

Vanessa Fox, author of Seattle-based author of Marketing In The Age Of Google, looks for Google and Microsoft to slug it out to see who can do a more effective job anticipating what the person typing the query is truly seeking. Fox notes that 45% of the search queries we type are just one or two words. This makes it difficult for the search services to discern the searcher's intent, she says.

Google resolves this by correlating these queries with millions of others using the same term. So if you type "cats" you might get results for cat videos, if that's what most other people who typed "cats" were looking for, she says.

Bing, on the other hand, uses more of a browsing model. Type "cats" and it will offer you choices of categories of cat topics and try to guide you to what you were looking for. This works especially well for topics involving travel, shopping and health. "I think both engines are continuing to evolve to more of a model that takes into account searcher behavior and searcher intent and the key will be balancing privacy concerns," she says.

Demers credits Google's co-founders Larry Page and Sergey Brin for keeping the best poker faces in the tech industry. He says it's difficult to tell just how irked they are getting, if at all, by Bing's steady, incremental advances. "Google has gotten very good at developing a game plan and not overreacting to the constant barrage of Google Killers," says Demers. "I don't think you'll see a major sea change on Google's part just yet. You're more likely to see them continue to leverage acquisitions to strategically build out destinations to send their search traffic to."

Symantec Corp.'s decision to pay $1.28 billion to buy a division of VeriSign Inc. that sells security technology to websites highlights how quickly the companies are moving in opposite directions.

Symantec, best known for its antivirus software for personal computers, wants to secure more things.

With the VeriSign deal, announced Wednesday, Symantec will have spent nearly $3 billion in two years acquiring technologies that make it a bigger player in other parts of the security market, such as protecting data on mobile phones and delivering software over the Internet.

It wants to focus instead on a lesser-known but more robust part of its business: managing traffic to websites with addresses ending in ".com" and ".net," and collecting fees for registering those domain names.

VeriSign has been purging divisions for the past three years, after realizing it was spread too thin following a buying binge designed to insulate it from the kinds of problems it had after the dot-com collapse a decade ago.

Prior to Wednesday's deal with Symantec, VeriSign had sold more than a dozen businesses since 2007 for a total of nearly $1 billion. Some were curious choices for VeriSign to have in the first place, such as a division that did billing services for telecommunications companies and another that sold ring tones and insurance for mobile phones.

What Symantec gets out of the VeriSign deal is one of the Web's best-known brand names for security.

VeriSign's logo - a check mark and the tag "VeriSign Secured" - is ubiquitous on websites that have bought its security technology. The VeriSign division that Symantec is buying sells "certificates" to websites that want protection for their customers' data. The Secure Sockets Layer, or SSL, certificates allow data to be encrypted between a user's browser and a website's servers. A padlock icon appears on a user's browser when that technology is being used.

The certificate business has long been a cornerstone for VeriSign, but has come under pressure in recent years.

In part, that's because cheap SSL certificates sold by other companies are easy to come by. The competition has forced VeriSign to sell more of its cheaper SSL certificates, too, even though their security measures are weaker.

Revenue in that division rose just 3 percent last year to $410 million, while revenue in VeriSign's domain-name division jumped 12 percent to $616 million.

Still, at the end of last year, more than 1 million sites were using VeriSign's SSL certificates, making the business an attractive target for a company such as Symantec looking to extend its brand.

The deal is expected to close in the September quarter. Symantec said it expects the transaction to reduce its adjusted earnings by 9 cents per share for the current fiscal year. It won't add to adjusted profit until the September quarter of next year.

The business VeriSign is left with is a lucrative one, but whose weakness following the dot-com collapse was a key reason VeriSign went on a tear with its acquisitions.

VeriSign is critical in steering Internet traffic to ".com" and ".net" Web sites. Its directories help Internet computers locate websites and know where to send e-mail.

The company makes its money by collecting a fee every time someone registers or renews a domain name ending in ".com" or ".net." Although Web site owners buy names through third parties, VeriSign gets fees as operator of the ".com" and ".net" registries.

Those fees generally go up each year, and as of July 1 will be $7.34 per ".com" name and $4.65 per ".net" name. Those fees add up with some 85 million ".com" names and 13 million ".net" names registered - and they account for the bulk of revenue in the domain-name division.

Symantec shares were up 2 cents in extended trading. They had fallen 32 cents, or 2 percent, to close the regular trading session at $15.63. VeriSign shares rose 83 cents, or 3 percent, to $28.82 in extended trading, after falling 24 cents to close at $27.99.

Wednesday, May 19, 2010

Google Faces German May 26 Deadline on Street View Data on Privacy Concern‏Bloomberg

Google Facing Heat And New Legal Troubles With Street View Data In Europe

Google Inc., the owner of the world’s largest search engine, was asked by Germany to provide details by May 26 on data it erroneously gathered for the Street View mapping service, deepening its European woes.

“We need to see the used software to understand what was really saved,” Johannes Caspar, the data-protection commissioner of Hamburg, said in an interview.

German regulators are investigating how cars Google employed to drive around taking pictures for Street View ended up with private data from Wi-Fi networks that weren’t password- protected. Google said yesterday it deleted data mistakenly gathered from Wi-Fi networks in Ireland and was reaching out to do the same in other countries.

The Mountain View, California-based company is increasingly colliding with Europe’s data regulators who say it is neglecting privacy as it introduces features such as Google Buzz and Street View. Google, which has 79 percent of the search-engine market in Europe, will likely face further scrutiny and restrictions on the continent.

“I would expect market regulators to scrutinize Google more the bigger it gets and I think Google could put up a good fight,” said Alexander Wisch, a media analyst at Standard & Poor’s Equity Research in London.

Officials from 30 European countries last week said they want Google to further improve blurring techniques used to disguise images in Street View and consider manually tweaking images where faces or license plates can be recognized.

‘Privacy-Centric’

Google Chief Executive Officer Eric Schmidt said personal data the company erroneously gathered for Street View was not used in any way. Speaking at a conference outside London today, he said Google negotiates “hard” with governments on privacy issues. It has the most “privacy-centric” policy, he said.

“As a society we haven’t figured out what we want to do with all this new technology and what’s appropriate,” Schmidt said. “Societies will determine the outcomes differently.”

The European Union has been critical of Google.

“It is not acceptable that a company operating in the EU does not respect EU rules,” European Union Justice Commissioner Viviane Reding said in an e-mail to Bloomberg News. Reding told Google co-founder Larry Page in a meeting last June that “Google’s activities in the different EU member states related to Street View are subject to the control of the national data protection authorities.”

Page said today that the focus of regulators should be on harm done rather than on the potential for it. He said there was no actual harm resulting from the company’s policies.

European Troubles

“Google made a mistake, but they disclosed it,” said Massimiliano Trovato, a media and telecommunications regulations expert at the Bruno Leoni Institute in Milan. “They’re working with privacy regulators in the countries involved and, most importantly, they haven’t used the data collected.”

Concern about Google’s data-collection is among many run- ins the company has had with authorities in Europe.

In February, three Google employees were sentenced to six- month terms by an Italian court, which found them guilty of privacy violations. The case stemmed from a video clip that was uploaded to Google Video in 2006, which showed a group of school students bullying an autistic classmate.

A Paris court in December found Google’s book-scanning project violated some publishers’ and authors’ copyrights.

Germany’s Caspar said he plans more meetings with Google this week, including talks about a tool on Street View that would allow users to reject pictures of their property. Caspar is leading the probe because Google’s country headquarters are in Hamburg.
Other Conflicts

In a separate e-mailed statement today, he said, “The people responsible at Google have to use this case as an opportunity to once again adjust company policy toward a more transparent management of data protection.”

A Google spokeswoman based in London said the company’s priority is to delete data mistakenly collected in “the quickest and safest way.”

Caspar asked that Google not entirely delete all the information it has inadvertently collected since that will make any legal assessment difficult. “The data should be immediately removed from the operating business and only be used for clarification,” he said.

In the U.S., Google Buzz, a service introduced in February that lets people share photos and comments, created an outcry after it pulled users’ contacts from Google Gmail accounts automatically and displayed them to others.

Google is being sued in a California court over the service, after a letter sent to federal antitrust authorities in March by 10 members of Congress.

“I tend to feel some of these things are teething problems, but still Google could end up being restricted over some of the things they do,” said Sam Hart, a media analyst at Charles Stanley in London.